Thursday, October 17, 2013

Is Compulsory Taxation a Form of Slavery Akin to (Marxist) Wage Slavery?

Mat Zwolinskicomments on the “Bleeding
Hearts Libertarians” Blog HERE that theFoundation for Economic Education (mainly Hard Libertarians) suggests some
questions for a discussion after showing a film, Amazing Grace, about William Wilberforce (1759–1833), the campaigner to abolish slavery.Below is a quotation of one of the FEE
suggested discussion topics for viewers:

“Slavery deprives the slave of the right of private
property in his own person, as well as the right to sell his labor in a free
marketplace. In effect, it is taxation at the rate of 100%. America’s Founders
objected to British rule in part because they thought “taxation without
representation” was a form of slavery, but British taxes on the colonies then
were nowhere near as high as taxes in America today. Is there a point below
100% where taxes could be high enough to say that taxpayers are effectively
enslaved?”

Comment

I agree with Mat Zwolinski that FEE is overdoing
its hostility to taxation. By extending an analogy too far between taxation and
slavery, the FEE question compares the compulsory nature of taxation to the
compulsory labour of slavery, to get its result. FEE can sit back with
satisfaction that it has spread the idea of the common factor of compulsion in
the two quite distinct operations.

Ironically, FEE’s analogy was also offered for its own
purposes by Marxists, a quite different set of ideologues to FEE.Marx incorporated the analogy of wage
slavery for the unavoidable need of labourers to work (no work, no pay; no pay,
certain starvation), to that of slavery in its full sense (no work, certain punishment
and starvation).

Governments of all hues woke up at the end of the
18th century to the fact that they could widen the tax base to
include incomes, and literally have never looked back since Pitt’s brilliant
stroke to help fund the litany of expensive wars since the end of the 17th
century – his government was already fully committed to every conceivable tax then known to political economy – even Adam Smith could only rail against more
borrowing to fund wars against the Dutch and the French, the
Spanish, the former colonies in North America, and whomsoever stood in the way
of the second Empire, having lost the first in 1783).He also recommended that Britain should “endeavour to
accommodate her future views and designs to the real mediocrity of her
circumstances”(See the very last
line of Wealth Of Nations: WN V.iii. 947).

Does the FEE analogy work in the 21st
century?Not really. Governments
still waste money and they still spend on preparing for war and fighting wars
(in Britain’s case, once again, while bereft of resources to pay for
them).But much of government
spending is unavoidable and must still be paid for by taxation and
borrowing.Inevitably that
means some level of taxation, of which there is a necessary level of income
taxation.

To cancel income taxation and spending would throw
millions of people into self-dependency, inevitably including social distress
and illegality, which in turn would mean those with the means to be armed,
would be armed, and would use them.Not all or any of which would be run as “a well regulated militia” (US
Constitution, 2nd amendment). Nowadays, that requirement is stretched
to mean the right of any individual, no matter how “crazed”, to bear arms for
any reason or any purpose.At the
very least, social strife on a large scale would ensue, sticking Hard
Libertarians in a frenzy of their own making.

So taxation in principle is justified by common
consent but must still be paid for by somebody.How much is enough or too much? are properly the subjects of
politics.

As a Soft Libertarian, as I am, and I think Adam
Smith was too, I do not consider my working life in any way corresponded to
what FEE’s Hard Libertarianism appears to suggest, in the sense of it being
comparable to slavery because I am compelled to pay taxes, nowadays on
consumption (VAT), or on income tax from (small) investments and my (small) pension,
or to the Marxist theory of wage-slavery from my working for wages to earn a
living.